Johannesburg - First National Bank announced a cellphone-based instant money transfer service between South Africa and Zimbabwe on Tuesday.
"We have done extensive research into the cross-border remittance market and devised a service that is readily accessible to the people who need it most," Yolande van Wyk, head of digital and alternative banking for FNB Africa, said in a statement.
"People don't always have the time to travel to the bank during working hours, and often need to send money home instantly and easily."
Van Wyk said the service was based on a tiered pricing structure, so sending R1 000 would cost R45, which was 4.5% of the value of the remittance. From R1 001 to R1 500, the fee was R70, and so on.
FNB said that according to the World Bank, 20% of the money sent to Zimbabwe from South Africa was spent on getting it there.
The banking group also drew on research which found that an estimated 1.9 million Zimbabweans living and working in South Africa sent an average R6.7 billion a year to Zimbabwe.
According to a World Bank chart of remittance percentages, FNB, Nedbank and Standard Bank charged over 18% to send money to Zimbabwe, with Absa charging 15%, for online services.
Western Union charged 8.7% for cash to cash. Bank of Athens charged 39% and Bidvest 32%. The total average charge for the first quarter of 2013 was 17%.
With their new product, FNB said there were no currency conversion rates for the sender and zero transaction fees for the recipient.
Recipients did not have to be pre-registered, but had to be residents of Zimbabwe and to hold a Zimbabwean identity document.
Recipients could collect their money at OK stores in Harare and Bulawayo. FNB planned to roll out the initiative to other outlets in Zimbabwe.
The sender would receive an sms notification that the money had been collected. If it was not collected within 14 days, the money was reversed into the sender's account.
Van Wyk said the sender from South Africa had to be an FNB account holder and a permanent resident of South Africa.
The system was compliant with the exchange regulations of the SA Reserve Bank (SARB) and the Zimbabwean central bank. Users could not send more than the R1 million a year discretionary allowance set by SARB.
The sender also had to comply with any law or exchange control regulation which set out how much and under what circumstances money may be sent out of South Africa.
FNB had established a commercial agreement with OK to facilitate the transfers.
Van Wyk said if a receiver had a problem, FNB did not have branches in Zimbabwe, so OK would refer the matter to South Africa to be resolved.
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